Until 2021, Mexico ranked fourth position as a global producer of auto parts. However, factors such as nearshoring, the USMCA (T-MEC in Spanish), and the presence of Chinese automakers have propelled the national industry significantly.

With Tesla’s introduction, the rise of Chinese brands in the Mexican market, the USMCA, and, above all, nearshoring, Mexico intensifies its competition with Japan for the third global position as an auto parts manufacturer, according to Francisco González, president of the National Auto Parts Industry (INA).

By the end of 2021, Mexico climbed to the fourth position in the production of vehicle parts and components, surpassing Germany. From this point, the Mexican auto parts industry has shown record growth, while Japan has experienced a decline in automotive activity.

According to INA statistics, it is projected that the production of auto parts in Mexico will reach $121.716 billion by the end of 2023, reflecting a 17% increase compared to the previous year.

In contrast, Japan, which billed around $170 billion in auto parts manufacturing in 2022, has faced challenges due to disruptions in supply chains, resulting in a shortage of parts and components in the nation. Furthermore, the opportunity for companies to relocate from Asia to North America due to nearshoring has led to a decrease in Japanese production, as stated by the INA president.

“The growth (in Mexico) remains very strong. We just surpassed Germany for the fourth position, Japan is complicated, but we are growing quite a lot (at double digits), and Japan is getting smaller. So, we are in a fight to be in the third place in the coming years,” highlighted Francisco González.

Thanks to nearshoring, Japanese authorities project investments in Mexico totaling $4 billion by the year 2024. According to INA data, 40% of nearshoring investments that have reached Mexico have been directed to the creation and expansion of companies in the auto parts industry. Of this capital, 11% comes from Japan. According to the INA president’s estimates, within two years, Mexico could secure the third position.

Source: https://bitly.ws/39YfD